Seattle: 1900-1920 -From Boomtown, Through Urban Turbulence ...

24 Part Oneof the industry, the National Electric Light Association(NELA), began lobbying for the establishment of stateregulatory commissions to prevent municipalities fromconstructing their own electrical plants and distributionsystems. Douglas Anderson, in his Regulatory Politicsand Electric Utilities, convincingly documents NELA’scampaign to make state regulation the alternative tomunicipal ownership. By 1904 the Chicago utilitiesmagnate Samuel Insull was able to convince a majorityof NELA members of the wisdom of this tactic. NELA’sbasic tenet was as follows: “Public regulation andcontrol, if efficient, removes the necessity or excuse formunicipal ownership. . . . If public regulation shall fail toestablish good understanding between the corporationsoperating public utilities and the customers of thosecorporations, we shall inevitably have a revival of thecry for municipal ownership.”If any ambiguity remained, NELA cleared theair: “If state commissions be constituted, they shouldbe appointed in that manner which will give them thegreatest freedom from local and political influences.”From generators beside the CedarRiver the City Light current traveledforty miles to the municipally ownedutility’s first distribution station atSeventh Avenue and Yesler Way. At45,000 volts the operation set a recordwith its transmission voltage.Key to eliminating municipal competition would be the enactment of a certificate-ofnecessitylaw. Under such a law, any municipality that chose to erect its own electric plantwould have to demonstrate to the regulatory agency that a necessity for one existed. If theregulatory body were properly under control, as noted in NELA’s protocol, certificationwould be denied. When the Washington State Railroad Commission was expanded to coverutilities in 1911, becoming the Washington State Public Service Commission, municipallyowned utilities were exempted from its jurisdiction, to the dismay of the private utilities.Consequently, the private utilities repeatedly sought legislation requiring certificates ofnecessity; when they won this legislation, the voters rejected it by referendum, as we shallsee, in 1916 and in 1922.Industrial RelationsIndustrial relations were also transformed during these early years. The variousbusinesses already referred to necessarily had to employ workers. How the firms paid themand under what conditions they were to work affected profits. Ideally, businesses would getmaximum productivity at the lowest possible cost. How a business achieved this dependedheavily on its negotiations with its employees. If it could set the terms of employment bybargaining with each employee individually the firm had maximum advantage, particularlyif the skill being sought was in abundance. This advantage would sometimes lead todictatorial control of the workplace, sometimes to a benevolent paternalism, and sometimesto some other accommodation. If the employees joined together in a union, the firm would